The change is part of new business banking boss Mike Vacy-Lyle’s attempt to boost the banks ability to lend money to businesses outside straight property loans.
Vacy-Lyle also sees CBA’s technology leadership as a big boost to its business.
Customers who already transact with the bank can access new funds in just 15 minutes applying digitally with full approval, he said.
This digital leadership also played its part in the early days of the COVID lock downs.
Vacy-Lyle has been in the job for six months and thinks Australian business lending is focused too much on property and not enough on actual business needs.
In an interview with The Australian he said: “I want to get the conversations back to basic business, foreign exchange, capital needs, interest and receivables.”
The immediate challenge is COVID-19 and CBA took the early step of converting all its business loans onto a deferred footing, unless businesses opted out.
Initially 10 per cent opted out, but the level is now up to 40 per cent.
The bank has some $17bn billion in loans outstanding to businesses with less than $5 million a year in revenue.
This leaves around 59,000 with around $14bn in debt, which took the deferral and the bank is in the process of checking with the customers to see how they are going.
At this stage it seems only around 2 to 3 per cent are what Vacy-Lyle would describe as high risk customers.
The bank is hoping to get borrowers back onto normal terms from October.
CBA has around 22 per cent of small business transaction market share and around 18 per cent of relationships.
It trails NAB on the second score and Vacy-Lyle and his boss Matt Comyn are aiming to grab control of the business lending market.
He concedes right now demand is weak given the state of the economy and the bank’s main transactions are refinancing existing loans.
The move of staff into branches is part of the push to develop longer term relationships so customers don’t get pushed to a call centre.’
The time is right for counter cyclical lending, Vacy-Lyle said, with the focus on hospitality and agriculture.
“The evidence shows when restrictions are lifted people have flooded back to restaurants pubs and clubs,” he said.
In agriculture Vacy-Lyle has a focus on food security, but also on plant-based nutrition crops, like avocado and nuts.
The bank is also looking at food security in general and food processing among other manufacturing sectors.
“Security of supply chains is a big issue,” he said.
Like the rest of the business community, Vacy-Lyle is counting the days to a more normal time.
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CBA is doubling the number of business bankers in branches in an attempt to convert its market share lead in small business transactions into longer term relationships.